The U.S. Postal Service (USPS) recently issued a statement warning it could default on nearly $6.9 billion USD (about $8.65 billion Cdn.) in payments for future health and pension benefits for its retired employees.
According to a story published by the Associated Press earlier this month, this is the fifth consecutive year the USPS has missed its pension payments, possibly foreshadowing a “coming cash crunch that could disrupt day-to-day mail delivery.”
U.S. Postmaster General Megan Brennan highlighted the need for American postal regulators to grant the USPS more freedom in determining stamp prices in an effort to reduce financial stress and offset the ongoing decline of first-class mail (known as lettermail in Canada).
“Our financial situation is serious, but solvable,” Brennan told Hope Yen, of the Associated Press, in a story published earlier this month. “We’re clearly looking for the PRC [Postal Regulatory Commission] to establish a new pricing system for us.”
The PRC is slated to make a decision on stamp pricing next month.
The USPS has reported deficits for 10 consecutive years, including $5.6 billion USD in losses last year, and has already defaulted on $33.9 billion USD in pre-payments for health benefits. Without a resolution to these dire financial states, U.S. taxpayers might eventually be forced to pay for future USPS retirees’ legally entitled benefits.